The population problemThe population problem

Social security system and education decide the Social security system and education decide the reproductive behaviour of the population.reproductive behaviour of the population.

To study causes & consequences of population growth and to find how population affects & gets affected by development process

Our future depends on our choices – population Our future depends on our choices – population is one of thoseis one of those

Our choices in the next 10 years will decide the Our choices in the next 10 years will decide the speed of population growth – enormous speed of population growth – enormous pressure on food & environmental resourcespressure on food & environmental resources

Thomas Malthus: Population is a trap for Thomas Malthus: Population is a trap for economies are trying to develop - economies are trying to develop - in Y ⇧ in Y ⇧ in ⇧ in ⇧population – land fails to supply more food population – land fails to supply more food

David Pimentel : 1994: optimum global David Pimentel : 1994: optimum global population – 2 billion - ⅓ of current population population – 2 billion - ⅓ of current population level - level - ∴ we must ⇩ population ∴ we must ⇩ population

Contrasting views by 3Contrasting views by 3rdrd world countries – world countries – late Julian Simon: pessimists have late Julian Simon: pessimists have overstated the seriousness of the problem overstated the seriousness of the problem - - is desirable⇧ is desirable⇧

World population growthWorld population growth

In the beginning at 0.04% p. a. when it was In the beginning at 0.04% p. a. when it was 250,000,000250,000,000

Now at 1.5% p. a. and > 6 b and next 6 b will Now at 1.5% p. a. and > 6 b and next 6 b will take only 50 yearstake only 50 years

In recent yrs the rate of growth In recent yrs the rate of growth ⇩ - refer p105⇩ - refer p105 some countries the rate of some countries the rate of ⇧ substantial⇧ substantial India: 1.2% China: 1% India: 1.2% China: 1% 98% of population growth between 1998-98% of population growth between 1998-

2025 will be in poorer countries2025 will be in poorer countries

Population growthPopulation growth

Age structure is important – no. of people in child Age structure is important – no. of people in child bearing age & no. of children those people are bearing age & no. of children those people are bearingbearing

Replacement rate – once reached takes 25 years Replacement rate – once reached takes 25 years for population to stabilize. During 1991 – 2001 for population to stabilize. During 1991 – 2001 growth rate in growth rate in

Europe < 0.5%, China 1.1%, Europe < 0.5%, China 1.1%, Sri Lanka 1.3%, India 1.9%Sri Lanka 1.3%, India 1.9% How population growth affects sustainability? How population growth affects sustainability?

How can population growth be altered when it is How can population growth be altered when it is appropriate? appropriate?

Population growth affects economic growthPopulation growth affects economic growth When marginal product is < average product, When marginal product is < average product,

adding more persons adding more persons welfare of average ⇩ welfare of average ⇩citizencitizen

Total output: O = L × X Total output: O = L × X Per capita output = O ∕ P = (L ∕ P) × XPer capita output = O ∕ P = (L ∕ P) × X Population in labour force & output per worker Population in labour force & output per worker

decide the way the population growth affects the decide the way the population growth affects the growthgrowth

Population with higher growth rate has higher % of Population with higher growth rate has higher % of younger personsyounger persons – slow growth – slow growth older population older population

IndiaIndia19511951 20012001

DRDR 27.427.4 8.68.6

BRBR 39.939.9 27.127.1

19511951 20012001

Sex compositionSex composition 927927 933933

Life expectancyLife expectancy 3232 6464

Literacy rateLiteracy rate 18%18% 65.4%65.4%

Infant mortality rateInfant mortality rate

DensityDensity

146146

117117

57.9257.92

324324

Youth effectYouth effect: abundance of youth – large supply of young population too : abundance of youth – large supply of young population too young to workyoung to work

Retirement effectRetirement effect: slow population growth – many in 60+ group: slow population growth – many in 60+ group Many developing countries experience both simultaneously as public Many developing countries experience both simultaneously as public

heath facilities heath facilities DR DR How Y and RE interact to determine the % of population in labour force?How Y and RE interact to determine the % of population in labour force? Female availability effect: a few children & slower rate of growth of Female availability effect: a few children & slower rate of growth of

population – more women available population – more women available

Connection between population growth & capital Connection between population growth & capital accumulation – CA enhances productivity – Relation accumulation – CA enhances productivity – Relation between population & CA – age structure important between population & CA – age structure important – old save more - rapidly growing population – old save more - rapidly growing population ⇩ ⇩ savings savings ⇩ Investment ⇩ Investment – low productivity – low productivity

Negative effect of population growth on Negative effect of population growth on economic development – due to limited economic development – due to limited supply of land & raw material supply of land & raw material

∴ ∴ addition of variable factor to some fixed addition of variable factor to some fixed factors, will bring in Diminishing Marginal factors, will bring in Diminishing Marginal Productivity ∴ PCI falls with Productivity ∴ PCI falls with in population in population

Population growth can enhance per capita Population growth can enhance per capita growth due to technological progress & growth due to technological progress & economies of scaleeconomies of scale

Labour employed on fixed amount of landLabour employed on fixed amount of land PPt1t1 : functional relationship between MP of labour : functional relationship between MP of labour

& no. of labour employed on fixed land at the time & no. of labour employed on fixed land at the time period tperiod t11

As time passes technological progress is more As time passes technological progress is more with rise in population viz. Pwith rise in population viz. P t2t2 & P & Pt3t3

With LtWith Lt11 labour, MP is Mt labour, MP is Mt11

At LtAt Lt22 & Lt & Lt33 it is Mt it is Mt22 & Mt & Mt33 More labour will result in higher MPMore labour will result in higher MP If technology was not to improve then LtIf technology was not to improve then Lt22 & Lt & Lt33 will will

result in (with Ptresult in (with Pt11) A & B ) A & B ∴ Diminishing marginal ∴ Diminishing marginal productivityproductivity

Thus technical progress Thus technical progress escape from DMP escape from DMP

22ndnd source of source of in output per worker is economies of in output per worker is economies of scale scale increasing returns increasing returns

⇧ ⇧ in population in population more demand more demand large scale large scale production - Today: Global trade production - Today: Global trade LS production LS production

There is no strong correlation between population ⇧There is no strong correlation between population ⇧& growth in PCI& growth in PCI

National Research Council (1986):National Research Council (1986): tried to find tried to find evidence - generally, no strong correlation - found that:evidence - generally, no strong correlation - found that:

1.1. Slower popu Slower popu ⇧⇧ capital per worker ⇧ capital per worker ⇧ ∴ ∴ ⇧ ⇧productivityproductivity

2.2. Slower popu growth - unlikely to result in reduction in Slower popu growth - unlikely to result in reduction in agri productivity & may raise itagri productivity & may raise it

3.3. Density of popu & economies of scale are not relatedDensity of popu & economies of scale are not related4.4. Rapid popu growth puts more pressure on resources, Rapid popu growth puts more pressure on resources,

depletable & renewabledepletable & renewable

In 1980s negative effect of popu growth seen In 1980s negative effect of popu growth seen for the first timefor the first time

Kelley & Schmidt: -ve impact of demographic Kelley & Schmidt: -ve impact of demographic change change with the level of eco development – ⇩ with the level of eco development – ⇩larger impact in relatively poor countries – larger impact in relatively poor countries – those who need to have those who need to have ⇧ ⇧ in their std of living in their std of living are more adversely affected by populationare more adversely affected by population⇧⇧

⇧⇧ in population in population → ⇧→ ⇧ income inequality - gap income inequality - gap between rich & poor between rich & poor ⇧ - ⇧ - Higher fertility Higher fertility affects the sizeaffects the size (⇧) & quality ( (⇧) & quality ( )⇩)⇩ of labour of labour forceforce

∴ ∴ Controlling population is important asControlling population is important as slower population growth slower population growth income ⇩ income ⇩inequality as inequality as it improves education & it improves education & health levels of children – powerful health levels of children – powerful motivation to control populationmotivation to control population

Effects of Effects of increasing increasing populationpopulation

Increasing population

Increase in supplyOf labour

Fall in wages

Increase in profitIncrease in

inequality

Population & EnvironmentPopulation & Environment

⇧⇧ population population environmental degradation environmental degradation ⇧ ⇧ density density poverty poverty ⇩ ⇩ forest lands as trees are cut down - keeping forest lands as trees are cut down - keeping

fallow land (7 years) not possiblefallow land (7 years) not possible Land : man ratio declines as supply of land is fixed Land : man ratio declines as supply of land is fixed

Use of marginal land with low fertility - Intensive Use of marginal land with low fertility - Intensive cultivation - cultivation - subdivision - fragmentationsubdivision - fragmentation tiny holdings tiny holdings

Erosion of land, especially of marginal land - Erosion of land, especially of marginal land - ∴ ∴ degradation of land degradation of land

Pressure on land in Pressure on land in IndiaIndia – of rising demand for – of rising demand for apartments & of reducing availability of water for apartments & of reducing availability of water for farmland – selling land to builders – further less farmland – selling land to builders – further less productionproduction

Effects of economic development on Effects of economic development on population growthpopulation growth

Theory of demographic transition :Theory of demographic transition : stage Istage I: : in ⇧ in ⇧population, population, stage IIstage II: rapid rise in population, : rapid rise in population, stage IIIstage III: life expectancy ⇧: life expectancy ⇧

HIV & AIDS changed this theory in sub-HIV & AIDS changed this theory in sub-Saharan Africa – pandemic of AIDS – SAARS Saharan Africa – pandemic of AIDS – SAARS – now new: H1N1– now new: H1N1

The theory is useful in countries where DR has The theory is useful in countries where DR has ⇩ ⇩ because reduction in population growth because reduction in population growth accompanies accompanies ⇧ ⇧ std of living in the long runstd of living in the long run

Many questions unanswered:Many questions unanswered:

1. Why BR falls in the long run?

2. Can the fall in BR be hastened?

3. Will the lower income countries automatically experience demographic transition as standard of living improves?

4. Can industrialisation or better agricultural production systems give any solutions to ‘the population problem’?

To find answers to these we need to look deeper into the sources of change that create demographic transition. Once identified, they can be manipulated to produce maximum social benefit.

The Economic approach toThe Economic approach topopulation controlpopulation control

Is current rate of population growth efficient & Is current rate of population growth efficient & sustainable?sustainable?

WhenWhen popu growth popu growth in ↓ in PCI – not in ↓ in PCI – not sufficient to prove that inefficiency exists sufficient to prove that inefficiency exists

When ↓ output is borne by the families with When ↓ output is borne by the families with children children it is conscious decision by the it is conscious decision by the parents to sacrifice production to have more parents to sacrifice production to have more children – net benefit from having children > net children – net benefit from having children > net benefit lost as output per person declinedbenefit lost as output per person declined

Do parents always make effective child -Do parents always make effective child -bearing decisions?bearing decisions?

““No” for 3 reasons:No” for 3 reasons:

1. These decisions impose external costs outside – transport, gardens, books…

2. Prices of services related to child-bearing are inefficient ∴ sending wrong signals

3. Parents are not aware of birth-control methods or may not have access to those

Two sources of market failure can be identified :Two sources of market failure can be identified :

Parents don’t think of externalities when they Parents don’t think of externalities when they think of having children – theirthink of having children – their decisionsdecisions optimal for individuals but optimal for individuals but inefficiently large inefficiently large populationpopulation

1. ‘congestion externalities’ – cost intensified when free access for common property – using resources at higher than optimal capacity

2. High population growth intensifies income inequality - Income inequality is a public good

3. People like to have better equality because (i) humane approach (ii) inequality tension in the society – less pleasant to life - charitable institutions to reduce inequality

Low cost of food & education will boost Low cost of food & education will boost population rise – in developing countries food population rise – in developing countries food subsidised – education free / subsidised – subsidised – education free / subsidised – ∴ ∴ marginal cost of having a child is littlemarginal cost of having a child is little

School/education taxes same irrespective of School/education taxes same irrespective of no. of childrenno. of children

Social cost of educating a child > additional Social cost of educating a child > additional cost of education of a child – cost to parents is cost of education of a child – cost to parents is not sensitive to number of childrennot sensitive to number of children

Many cultures – right to bear children – India – Many cultures – right to bear children – India – dictating the size of family - election lost dictating the size of family - election lost

Failure to control family size Failure to control family size devastating to devastating to quality of life quality of life

Democracy & control? Flexibility to families in Democracy & control? Flexibility to families in choosing their family size and gaining control choosing their family size and gaining control over population growth?over population growth?

Successful population involves:Successful population involves:

1. Lowering desired size of the family

2. Providing sufficient access to contraception & family planning

3. Identify the factors that affect & change the reasons to have more children

Micro-economic theory of fertilityMicro-economic theory of fertility

Children are like commodities, higher the cost of Children are like commodities, higher the cost of

bringing them up less are they desired.bringing them up less are they desired.

Marginal benefit &

cost - € per child

MB1

MB2

MC1

MC2

Q4 Q3 Q4 Q1 O No. of children

Why MB - demand curve shifts inward?Why MB - demand curve shifts inward?

1. In agricultural sector children work on farms – but in industries no contribution – child labour laws ∴ low demand for children

2. Children for old age – when other ways are open benefit from additional child falls – PF, pension..

3. Woman’s status depends on no. of children she bears ∴ benefit from additional child – Now?

4. ⇩ in infant mortality in no. of births⇩

5. How employment is shared among members of ⇧the society - fertility declines in spite of low PCI - with relatively equal distribution of Y + widespread participation in the benefits of growth - Dramatic fall in fertility in Korea during 1960 -74

Cost of childrenCost of children too decides family size too decides family size ∴ ∴ change MC as a means of controlling the populationchange MC as a means of controlling the population

- Main component is opportunity cost of mother’s time – Main component is opportunity cost of mother’s time – women’s entry into labour market women’s entry into labour market ⇧ it – higher ⇧ it – higher marriage age – less no. of childrenmarriage age – less no. of children

- Housing space is more expensive in urban areasHousing space is more expensive in urban areas- Cost of education -children in school than Cost of education -children in school than

working working - More & higher quality of education for childrenMore & higher quality of education for children

It is found that:It is found that:1.1. Richer the family Richer the family higher the education & higher the education &

better health carebetter health care2.2. Rise in the value of mother’s time has +ve Rise in the value of mother’s time has +ve

effect on demand for contraceptive services effect on demand for contraceptive services & -ve effect on fertility& -ve effect on fertility

3.3. Rise in the value of father’s earnings has Rise in the value of father’s earnings has +ve effect on completed family size, child +ve effect on completed family size, child health, educationhealth, education

4.4. Increase in mother’s schooling has –ve Increase in mother’s schooling has –ve effect on fertility & infant mortality & +ve effect on fertility & infant mortality & +ve effect on nutrition & children’s schoolingeffect on nutrition & children’s schooling

To empower womenTo empower women Effective methods of controlling the populationEffective methods of controlling the population- Through IThrough Itt in human capital (education & training) or in human capital (education & training) or

physical capital (machinery etc.)physical capital (machinery etc.)- Collateral? - no own property – opportunities lostCollateral? - no own property – opportunities lost- Bangladesh – innovative solutionBangladesh – innovative solution- Better income better population control, especially in Better income better population control, especially in

third world – for both rich & poorthird world – for both rich & poor- Women are at the centre of process of change as Women are at the centre of process of change as

mothers, producers, suppliers of food - fuel - water, mothers, producers, suppliers of food - fuel - water, traders etctraders etc

- Desire to Desire to ⇩ size of the family - not enough to ⇩ size of the family - not enough to access birth control informationaccess birth control information

- Access to means of family control + better education Access to means of family control + better education + employment opportunities = better result + employment opportunities = better result

Finally, Finally, World population growth has slowedWorld population growth has slowed Enter into ‘zero population’ growthEnter into ‘zero population’ growth Fall in population – less ss of labour – rise in Fall in population – less ss of labour – rise in

average age – PCI of family rises average age – PCI of family rises Lower population growth Lower population growth Y-inequalities Y-inequalities Low SS of labour Low SS of labour higher wages higher wages Plays significant role in maintaining sustainability Plays significant role in maintaining sustainability Smaller population has better share of growth Smaller population has better share of growth

advantagesadvantages